An Empirical Analysis of the Performance of Islamic Banking in Nigeria: A DEA Approach

17 Pages Posted: 18 Sep 2016

Date Written: September 14, 2016

Abstract

Nigeria is the most populated nation in Africa with more than one hundred and seventy million people and it has been estimated that more than 50 percent of the population are Muslims, hence the high demand for an interest free banking. Even with this viable market little is known of the viability of an Islamic banking system. This paper therefore, examines the performance of the only Islamic bank in Nigeria, using Data Envelopment Analysis and Financial Ratio Analysis. The paper uses secondary data mainly from the published account of the bank for the period since the bank existed and of other conventional banks used in the analysis. The paper found the bank to have performed reasonably well compared with other conventional banks and the industrial average. The result of the DEA shows that the bank has performed better than some of the conventional banks in the utilization of its inputs. It is the recommendation of the paper that the bank should expand its operation to cover all the states of the federation, improve its effort in creating awareness and also encourage more investment in associated businesses that affects the banks operation.

Keywords: DEA, Financial Ratios, and Jaiz Bank Nigeria

Suggested Citation

Tanko, Professor Muhammad and Alhaji, Yusuf and Dabo, Zainab, An Empirical Analysis of the Performance of Islamic Banking in Nigeria: A DEA Approach (September 14, 2016). Available at SSRN: https://ssrn.com/abstract=2838637 or http://dx.doi.org/10.2139/ssrn.2838637

Professor Muhammad Tanko (Contact Author)

Kaduna State University ( email )

Tafawa Balewa Way
P. M. B. 2339
Kaduna State
Nigeria

Yusuf Alhaji

Independent

Zainab Dabo

Independent ( email )

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